If the only thing you looked at to judge market volatility was the VIX Index, which shows the market’s expectation of 30-day volatility, you would feel that all is well, as the index is trading at or near all-time lows. The fact of the matter is there is a host of events coming right around the corner in the fall, including the Federal Reserve meeting, European Central Bank tapering, U.S. political brinkmanship, China and North Korea and other geopolitical issues, and of course, the unknown, that all could affect the overbought stock market.

A new research report from Merrill Lynch makes the case that one of the cheapest ways to hedge a portfolio of stocks now may be to use gold call options. In fact, the report even goes so far as to note that gold calls offer record cheap safe-haven optionality.

The option market and process is very confusing to many people, and if you buy them and nothing happens, you only have two alternatives: Either call away the stock or exchange traded fund (ETF) or let them expire worthless. A better strategy may be to buy a single-digit percentage of gold stocks for a portfolio holding. We screened the Merrill Lynch gold research universe and found four that look like great ideas now, and all are rated Buy.

Agnico Eagle Mines

This is one of Wall Street’s most preferred U.S. gold producers. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden. The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.

The company reported strong second-quarter results that came in above estimates on the top and bottom line. Revenue was more than 2% than in the year-ago quarter.

Shareholders receive a 0.9% dividend. The Merrill Lynch price target for the stock is $56, and the Wall Street consensus target is $55.88. The stock traded early Friday at $45.20.

Goldcorp

This top company with a solid balance sheet makes sense for investors to consider. Goldcorp Inc. (NYSE: GG) engages in the acquisition, exploration, development and operation of precious metal properties in Canada, the United States, Mexico and Central and South America. It primarily explores for gold, silver, copper, lead and zinc deposits.

Goldcorp’s principal mining properties include the Red Lake, Éléonore, Porcupine and Musselwhite gold mines in Canada; the Peñasquito and Los Filos mines in Mexico; the Marlin property in Guatemala; the Cerro Negro and Alumbrera mines in Argentina; and the Pueblo Viejo mine in the Dominican Republic.

Some Wall Street analysts feel that the company deserves a premium valuation to its peers due to its excellent balance sheet, growth profile with lower cost new mines, longer average mine life and a solid dividend yield. Over the past few years, Goldcorp has been altering its mine plans, cutting spending and disposing assets in order to reduce costs and focus on the most profitable production.

Goldcorp also posted solid second-quarter results, and the analysts said this at the time:

Goldcorp reported second quarter adjusted earnings-per-share of $0.12, above ours and consensus at 8 and 9 cents. Gold sales were higher than forecast. For 2017 Goldcorp maintained its gold output guidance of 2.5 million ounces but the company lowered AISC by 3% to $825/oz. Due to lower capital spending, our analysis indicates the company will be free-cash-flow positive in 2017. Maintain Buy on undervaluation.

Goldcorp investors receive a 0.6% dividend. Merrill Lynch has a $20 price target, and the consensus target is $16.98. Shares traded Friday morning at $12.60.

Newmont Mining

This is one of the largest mining companies, and its stock is a solid buy for more conservative accounts. Newmont Mining Corp. (NYSE: NEM) is a leading gold and copper producer. It employs approximately 29,000 employees and contractors, with the majority working at managed operations in the United States, Australia, Ghana, Peru, Indonesia and Suriname. Newmont is the only gold producer listed in the S&P 500 index.

Earlier this year the company announced that “first gold” has been poured at its new mine, called the Merian gold mine, in Suriname in South America. Newmont reported Merian contains gold reserves of 5.1 million ounces and that annual production is expected to average between 400,000 and 500,000 ounces of gold at competitive costs during the first five full years of production.

The company also posted strong results, and the analysts said:

Newmont reported second quarter adjusted earnings per share of $0.46 that was a big beat versus our numbers and consensus both at $0.26. 2017 operating guidance was increased to 5.00-5.40 million ounces and CAS and AISC unit cost guidance were both lowered. Net debt continued to decline, down to $1.52 billion as of June 30, 2017; net debt has been reduced by 70% since 2013.

Shareholders receive a 0.8% dividend. The $47 Merrill Lynch price objective compares with the consensus target price of $40.31. The shares traded on Friday at $36.30.

Royal Gold

This a solid pick for investors looking for a gold presence with somewhat less risk. Royal Gold Inc. (NASDAQ: RGLD) is a precious metals royalty and stream company engaged in the acquisition and management of precious metal royalties, streams and similar production-based interests. The company owns interests on 193 properties on six continents, including interests on 38 producing mines and 24 development stage projects.

The company maintains a solid asset base of long-life royalties operated by some of the best gold mining companies in the world. Royal Gold announced earlier this fall the acquisition of a 3.75% net value royalty (NVR) on the Crossroads deposit for $70 million. Starting in fiscal 2019, the NVR is expected to add $8 million of annual revenue to the company.

Merrill Lynch feels the company is very undervalued when compared to its sector peers. Backed by three new or expanding assets, the firm sees Royal Gold’s revenue growing by 13% to nearly $500 million by fiscal 2019. Royal Gold’s strong liquidity position means it can compete for royalty and stream acquisitions.

Shareholders receive a 1.11% dividend. Merrill Lynch has set its price target at a whopping $92.50. The consensus target is $85.64, and shares traded Friday at $85.60.

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Proper asset allocation should always include a single-digit percentage holding of precious metal like gold and silver. Not only do they hedge over the long term, they can really help if the market does go in to correction or bear market mode, as they tend to trade inverse to markets.

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